COURT HOUSE – Part of the $1.9 trillion American Rescue Plan Act (ARPA) is a $28.6 billion Restaurant Revitalization Fund (RRF) aimed at helping restaurants and other food- and drink-related businesses stay open.
Registration for the Small Business Administration’s (SBA) application portal opened at 9 a.m. April 30 (https://bit.ly/3e3Qh9e). Applications will open at noon May 3.
SBA Deputy District Director John Blackstock announced the opening of registration as part of a webinar presentation sponsored by the Cape May County Chamber of Commerce April 28.
During the presentation, Blackstock dealt with issues of eligibility, document requirements, calculation methods, and how to apply for grants.
The chamber later reported there were technical difficulties that compromised the recording of the presentation, but the presentation slide deck is available on the Herald website (https://bit.ly/3nwofWW).
Who’s Eligible?
“It is almost easier to say who is not eligible,” Blackstock said, as he introduced an eligibility slide.
Eligibility extends to businesses that are not permanently closed, have less than 20 locations, and are businesses where the “public or patrons assemble for the primary purpose of being served food or drink.”
The list is extensive, running from traditional restaurants and bars to breweries, wineries, bakeries and coffee shops, to name a few.
Businesses operated by state and local governments are not eligible, nor are publicly traded entities or nonprofits.
Funding can be up to $5 million per location, not to exceed $10 million for an applicant. The minimum grant is $1,000.
The forms of organization for eligible businesses are equally broad, running from C-corporations to independent contractors to tribal businesses. Franchises that meet all other SBA requirements are also eligible for RRF assistance.
Businesses operating under an approved plan of bankruptcy reorganization are also eligible.
Relationship to Other SBA Programs
Applicants for the RRF grants cannot have received a Shuttered Venue Operator grant. Any Payroll Protection Program (PPP) funds received must be subtracted from the RRF grant amount. Applicants must also withdraw from any outstanding PPP applications.
All applicants must certify that the RRF grant request is necessary to support ongoing operations.
Use of Funds
There is great flexibility in the use of RRF grant funds. They may cover expenses for business operations, including payroll, maintenance, supplies, utilities and other areas. Construction expenses related to creating outdoor seating are also allowed.
Construction to expand the business is not an allowable expense. Funds may also be used for certain types of business debt.
The expenses for which the funds are used must have been incurred between Feb. 15, 2020, and March 11, 2023. Any funds not spent on eligible expenses by March 11, 2023, must be returned. If a business closes permanently after receiving funds, the covered period ends.
Applicants will be required to maintain detailed expenditure reports and a use of funds assessment.
Calculations
The presentation showed three possible ways in which an applicant can calculate potential fund amounts.
The first calculation, for businesses that were operating Jan. 1, 2019, uses 2019 gross receipts minus 2020 gross receipts minus any PPA funding.
The second calculation, for businesses that began operation partway into 2019, involves a 12-month averaging of 2019 gross receipts for the same calculation as number one.
The third calculation, for businesses that began operation after Jan. 1, 2020, requires expenses from Feb. 15, 2020, to March 11, 2021, minus gross receipts for 2020, 2021, and any PPA funds.
How to Apply
Blackstock said the SBA website (https://bit.ly/3e3Qh9e) will be used by most applicants. Businesses that use an SBA point-of-sale vendor can also apply through that vendor.
A final method will be to use the SBA RRF hotline, 844-279-8898, to apply over the phone.
Documents required include the application, tax verification information, gross receipts documentation, and, depending on the calculation used, other appropriate documentation.
Blackstock advised that some applicants may be helped by a CPA comfort letter attesting to the documentation’s accuracy.
Certain businesses, like breweries, will be required to show that 33% of gross receipts come from onsite sales of food or beverages.
The call center will be prepared to provide aid and respond to questions in multiple languages.
Priority Groups
There is a three-week priority period where the SBA will only process applications from businesses owned by women, veterans, and individuals who fit definitions for socially or economically disadvantaged groups. All others may apply at any time after applications begin.
The grant program will continue until funds are exhausted and will, other than for the priority groups, be on a first-come, first-served basis.
There are funding set-asides for the smaller businesses with gross receipts of less than $1.5 million in tiers down to not more than $50,000.
A funding program guide for RRF grants is available on the SBA website (https://bit.ly/3u0msMe).
Blackstock did not hazard a guess on how busy the call center and website will be when they open in a matter of days, but urged patience.
To contact Vince Conti, email vconti@cmcherald.com.
